MARKET WRAPS
Watch For:
University of Michigan Preliminary Consumer Survey for September; Canada Housing Starts for August; Canada Wholesale Trade for July
Opening Call:
Stock futures were falling on Friday as investors continued to fret over the size and timing of future interest-rate increases.
And a profit warning from FedEx was ringing alarm bells for Wall Street and beyond, with shares of the economic bellwether slumping, as analysts piled on downgrades and price target cuts.
Investors are increasingly spooked that the global economy is heading into recession. Delivery companies are the proverbial canary in the coal mine for the economy.
FedEx warned of a $500 million revenue miss, including in its European operations, a sign the energy crisis there is strangling activity.
Read more here.
Other Stocks to Watch:
General Electric shares were falling after the company's chief financial officer said supply-chain issues were still impacting deliveries.
The ongoing challenges, particularly affecting GE's aerospace and healthcare businesses, are set to impact the company's third-quarter performance, Carolina Dybeck Happe said Thursday.
Read more here.
Forex:
The dollar was higher in Europe, along with Treasury yields, as traders bet on the Fed delivering further aggressive interest-rate rises.
Despite mixed economic data on Thursday, markets have increased their rate-rise bets with March 2023 Fed Funds futures now trading at around 4.50%, compared with the current rate range of 2.25-2.5%, ING said.
"This marks a 50 basis points increase in peak rate expectations since the start of September, which has translated into a 40bp rise in two-year Treasury yields."
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GBP/USD fell to a one-week low of 1.1414 after data showed U.K. retail sales fell by a worse-than-expected 1.6% month-on-month in August.
Elsehere, USD/CNH rose 0,2% in Asian trading and is likely to extend gains to next resistance at 7.0500 after rising beyond the "psychological level" of 7.0000 on Thursday, based on technical charts, UOB Global Economics & Markets Research said.
The pair's upside break led to a swift and sharp surge which accelerated on Friday, UOB said.
Going forward, if 7.0500 is broken, focus will shift to 7.1000. On the downside, rising trendline support, currently at 6.9400, is a strong support level, UOB added.
Energy:
Oil futures wavered between small gains and losses in Europe and were on course for another weekly loss as demand concerns continued to drown out supply risks.
"Gas-to-oil switching should help to lift consumption over the winter months in the northern hemisphere, but overall demand levels will rest heavily on developments in China, where economic activity continues to falter," Fitch said.
Other News:
Germany took control of the German business of Russian oil giant Rosneft as Berlin races to safeguard its energy supplies before its planned ban on Russian oil imports kicks in later this year.
Read more here.
Metals:
Gold and base metals were lower in European trading, with the market expecting more aggressive central-bank action as the macroeconomic environment continues to weaken.
"The recent inflation surprises has proven bad news for risk assets since it's seen as giving the Fed the green light for faster rate hikes, " Deutsche Bank said.
Gold remained at its lowest since April 2020 and CBA said it could drift even lower "if the Fed hikes the Fed funds rate by 100bps--market pricing is currently around +81bps."
It said gold is likely to fall to an average $1,650/oz in the fourth quarter and closer to $1,625/oz in the first half of 2023 before bouncing.
"We now see gold futures trading in the $1,600-$1,700/oz range over the next year given our new call on the Fed funds rate broadly mirrors market expectations," CBA said.
TODAY'S TOP HEADLINES
FedEx to Close Offices, Park Aircraft After Warning of Sales Shortfall
FedEx Corp. said its quarterly revenue fell below its expectations and it was closing offices and parking aircraft to offset declining volumes of packages moving around the world.
FedEx shares tumbled 13% on the warning, which came after markets were closed Thursday and about a week before the company was scheduled to report results for the quarter ended Aug. 31.
Uber Responds to Breach After Hacker Claims Widespread Access
Uber Technologies Inc. is responding to a cybersecurity breach after a hacker claimed to have gained widespread access to the company's computer systems.
"We are currently responding to a cybersecurity incident. We are in touch with law enforcement and will post any additional updates here as they become available," a Twitter account for the ride-hailing company tweeted Thursday night.
GE Stock Falls as Supply-Chain Issues Weighing on Third Quarter
General Electric shares were falling Friday after the company's chief financial officer said supply-chain issues were still impacting deliveries.
The ongoing challenges, particularly affecting GE's aerospace and healthcare businesses, are set to impact the company's third-quarter performance, Carolina Dybeck Happe said Thursday.
Space Exploration Startup Intuitive Machines Nears $1 Billion SPAC Merger
Intuitive Machines LLC is nearing a merger with a special-purpose acquisition company that would take the space-exploration infrastructure provider public at a valuation that could top $1 billion, people familiar with the matter said.
Houston-based Intuitive Machines provides data and technology, including small spacecraft and robots, to support lunar missions by the National Aeronautics and Space Administration and others. NASA has said it hired Intuitive to deploy its Nova-C lunar-lander to the moon and also will use a company "hopper" robot on a separate lunar mission. Both operations are part of NASA's Artemis program and are slated to happen in the next few years.
Germany Takes Control of Oil Refineries Owned by Russia's Rosneft
BERLIN-Germany took control of the German business of Russian oil giant Rosneft Oil Co. as Berlin races to safeguard its energy supplies before its planned ban on Russian oil imports kicks in later this year.
The German government said it would place Rosneft's German subsidiaries under trusteeship. The business's flagship asset is the PCK refinery in Schwedt, eastern Germany, that provides Berlin and the surrounding region with much of its gasoline and aircraft fuel. Rosneft's Germany assets make up a total of around 12% of the country's oil-processing capacity, making it one of the largest oil-processing companies in the country.
China's Downturn Moderates, Though Property Woes Linger
HONG KONG-China's economy showed modest signs of improvement in August as stimulus measures kicked in, though renewed Covid-19 curbs and a worsening property downturn continue to damp the outlook for the world's second-largest economy.
A raft of data released Friday by Beijing offered a mixed picture: Infrastructure investment picked up more quickly than expected, but consumer spending remained weak and property prices accelerated their declines.
Glynn's Take: RBA's Embattled Governor Throws Spotlight Back on Budget Repair
SYDNEY--Outwardly, the governor of the Reserve Bank of Australia, Philip Lowe, is a well-spoken congenial country gent, but try to corner him in a battle of wits and you will likely come off second-best.
Mr. Lowe appeared before a parliamentary economic committee on Friday to face three hours of questioning about his recent handling of monetary policy.
SEC Climate Rule Won't Demand Extensive Reporting From Small Businesses, Gensler Says
A proposed climate disclosure rule wouldn't require public companies to ask small private suppliers to report on their carbon footprints, Securities and Exchange Commission Chairman Gary Gensler said, responding to concerns about compliance costs.
Public companies reporting emissions linked to their supply chain-known as Scope 3 emissions-can estimate the carbon footprint of small suppliers and still comply with the proposed rule, Mr. Gensler said Thursday at a U.S. Senate oversight hearing.
Russia's Vladimir Putin Says China's Xi Jinping Raised Concerns on Ukraine War
Russian President Vladimir Putin said he sought to address Beijing's concerns Thursday about the Ukraine war in his first meeting with Chinese leader Xi Jinping since the start of the conflict, which has recently brought major battlefield setbacks for Moscow.
Mr. Putin told his Chinese counterpart that Moscow highly values what he called Beijing's balanced position regarding the Ukraine crisis. He added that the Kremlin would clarify its position on Ukraine, without explaining further.
Ukraine Battles Flooding After Russian Strike on Dam
Ukrainian authorities said Thursday that they staved off flooding caused by a Russian missile strike on the southern city of Kryviy Rih, as Moscow targeted the dam with new salvos and Ukrainian forces consolidated their positions in recently retaken areas.
Changing its strategy after stinging military defeats, Russia this week began a campaign of cruise-missile strikes on Ukraine's civilian infrastructure. Wednesday's initial attack on a dam in Kryviy Rih followed a strike on Monday that disabled the main power station in the country's second-largest city of Kharkiv, knocking out electricity in much of eastern Ukraine.
Special Master Appointed to Review All Records Seized at Trump's Mar-a-Lago
U.S. District Judge Aileen Cannon appointed a respected retired judge to independently review the documents the FBI seized from former President Donald Trump's Mar-a-Lago home, and included those marked classified in his remit, which could prolong a court battle over the Justice Department inquiry into the sensitive materials found at the Florida resort.
(MORE TO FOLLOW) Dow Jones Newswires
09-16-22 0536ET
